Abuse of dominance

The abuse of a dominant position by a firm may include excessive pricing of goods or services, denying competitors access to an essential facility, price discrimination (unjustifiably charging customers different prices for the same goods or services) and other exclusionary acts (such as refusal to supply scarce goods to a competitor, inducing suppliers or customers not to deal with a competitor, charging prices that are below cost so as to exclude rivals, bundling goods or services and buying up a scarce input required by a competitor).

The Act prohibits the abuse of a dominant position by firms in a market, but does not prohibit firms from holding a dominant position. The hurdle for proving abuse of dominance cases are significant, they require extensive legal and economic analysis. This is evident in the small number of cases where abuse of dominance has been found and the extensive evidence that has been required for these findings. Firstly, proving allegations of an abuse of a dominant position require proof that the respondent is dominant. The Act uses both market share and market power to define dominance. Market power is the ability of a firm to behave in a manner that does not take into account the reactions of its competitors, customers or suppliers, or to control prices. Secondly, there must be evidence that the respondent is abusing its dominance.

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